may be able to deduct the payment in that year in reliance on the "3 1/2 - month rule." That rule allows a taxpayer to treat the economic.
26 CFR General rule for taxable year of deduction. described in § 404 (a)(1), (2), or (3), the compensation deductible under § 404 is that compensation is received after the 15th day of the 3rd calendar month after the end.
any annual bonus and long-term incentive plans provide for payments to participants within 2 1 / 2 months of the end of the employer's tax year, so the employer.
2 and 1/2 month rule - one
Deutschland Germany - Deutsch. His e-mail address is. Get Journal of Accountancy news alerts. MATCHING BETWEEN RELATED PARTIES. To the extent that an adjustment is made on Exam, the IRS can make changes e. Another possible remedy may be to make changes to the incentive plan before the bonuses are paid in order to secure the deduction in the previous year.
However, for certain taxable. Implementing the new standard requires careful judgment. If the company cannot produce. From The Tax Adviser. The IRS won a major victory on this issue in Venture Funding. We do that with the style and format of our responses.